Well Fargo Ethical Dilemma

Running Head: WELL FARGO ETHICAL DILEMMA
Well Fargo Ethical Dilemma
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WELL FARGO ETHICAL DILEMMA 2
Well Fargo Ethical Dilemma
Identify and discuss the main problems or concerns mentioned in this organization.
In September 2016, an investigation was held concerning the unethical behavior by Well
Fargo personnel. During this time, Well Fargo was issued with a $185 million in terms of fines
for generating around 2 million fake accounts besides 500,000 credit cards, which its clients not
at all approved. It was found that the majority of the Well Fargo staff made additional accounts
under the names of their customers without their knowledge and accrued bank fees from the fake
accounts that were created. There was not a trivial number of fake or falsified accounts that were
created by the employees-2 million fake accounts were created. The unethical practices had been
occurring for some years in the company and the company’s chief executive officer (CEO) since
2007, John Stumpf, openly refuted any information about the scam before 2013. Thus, this
scandal affected the repute of prioritizing client service, as well as cultural integrity. Well Fargo
suspended incentives for workers following the $185 million settlement with the regulators. The
scandal further resulted in the sacking of around 5,000 workers plus $5 million being allocated
for client reimbursements for accounts the clients, not at all required (Levine, 2016).
How did these problems develop and who was responsible?
Well Fargo fraudulent account opening came in light in 2016 where the firm was accused
by the Consumer Financial Protection Bureau (CFPB), the office of the Comptroller of the
Currency, as well as the Los Angeles City Attorney. These agencies alleged that the bank,
between 2011 and 2016, produced extra falsified bank accounts from the current clients.
Therefore, the problem within the bank came from the demands of the management that needed

WELL FARGO ETHICAL DILEMMA 3
the employees to sign more than 8 products on a single customer. The scam purportedly
emanated from the firm’s sales program that was created by Stumpf (Trevino & Nelson, 2016).
Thus, with the slogan “eight is great” the CEO’s program set stringent objectives for its workers
to deliver to the company by making more sales to boost the profit of the company. In addition,
sales associates and executives in Well Fargo were ordered to get eight products into the hands
of every client in the market. Therefore, these demanding quotas made the personnel being
ordered to make more sales to cut short-cuts, creating novel deposit accounts with no the
authority from the clients, as well as targeting clients from minority communities who spoke
little English. Therefore, the CEO and the managers should be blamed for the scandal because
they made unrealistic demands on its employees (Egan, 2016).
How could the problems have been avoided?
Well Fargo was aware of the problems that were taking place in the firm and undertook
no measures to stop these concerns, which affected millions of clients who had opened accounts
they were not aware of and many workers trying to attain impracticable sales objectives. Well
Fargo had aggressive selling goals and cashiers were needed to attain these demands to keep up
their rewards (Reckard, 2013). Thus, when inexperienced workers are faced with getting
remunerated decorously plus making ethical choices, these employees will go to the earlier. The
company must have executed additional training programs for the management along with the
staff to comprehend the significance of customer service above sales objectives. This could have
enabled the employees to prioritize client service rather than sales goals, thus avoiding the
fraudulent activity.